Payroll Giving

Payroll giving for individuals

For just a little over the cost of 3 x$4 coffees per week Baby Loss NZ could receive $20!!! That’s right you only pay $13 to give $20. How does that work? It’s called Payroll Giving:

Payroll giving enables employees to make donations directly from their wages and receive immediate tax credits via PAYE – in other words, you can give as you earn. If you donate this way you receive an immediate 33..33% tax credit. For example, if $15 is donated, it actually costs you around $10. Check out this table for more examples:

 

You pay Baby Loss Receives
6.67 10
10.01 15
13.34 20
16.67 25
20.01 30
23.34 35
26.67 40

 

 

You don’t need to keep receipts and wait until you file an annual donation claim form to get your tax credits. It’s immediate! And it is a great opportunity for businesses to demonstrate their commitment to the community in a practical way.

If you would like to support us we encourage you to talk to your employer to see if they offer the scheme and select Baby Loss NZ as your charity of choice . Please mention it to friends and family members too. It could be a great option for grandparents, aunts, uncles etc who would like to help others in memory of the angel baby/babies in their family.

 

Information on payroll giving                                                                                              

 (taken from http://www.ird.govt.nz/income-tax-individual/tax-credits/payroll-giving)

Payroll giving, where offered by your employer, gives you the opportunity to donate to approved donee organisations direct from your pay and receive immediate tax credits that reduce your PAYE payable. You don't need to wait until the end of the year to claim your tax credit.

Only employers who electronically file their employer monthly schedule and deduction form can choose to offer payroll giving to their employees.

Definition of donee organisation

A donee organisation is an organisation that has Inland Revenue-approved donee status. Anyone on the approved list is eligible to receive payroll giving donations.

Payroll giving and employees

If your employer offers a payroll giving scheme and you want to join, you need to:

  • check the donee organisation you wish to donate to is on our approved donee list
  • give your employer the:
    • name of the donee organisation
    • amount of the donation you want to make
    • pay period, or periods, you want the donation to be made
    • the donee organisation's bank account or postal address.

If your employer’s scheme allows, you can alter the frequency, amount and donee organisations you choose to donate to.

How tax credits for payroll donations work

Tax credits for payroll donations are calculated at 33.3333 cents for each dollar donated which is deducted from your PAYE.

Employers are responsible for calculating the correct tax credits for each payroll donation made by their employees.

The tax credit for payroll donations is 33.3333 cents for each dollar donated. Once the tax credit has been calculated, the employee’s PAYE is reduced by the amount of the tax credit.

Example showing how the tax credit affects tax payable on salary or wages

Hannah makes a payroll giving donation of $12 to her church. She is paid $2,140 every four weeks. This is her only job so her tax code is "M". Before the tax credit is applied her PAYE is $435.48.

The tax credit for Hannah's payroll donation is $3.99. Her employer applies the tax credit when working out Hannah's pay and Hannah's PAYE is reduced to $431.49 for that pay period.

Hannah's new take-home pay is now:

Income
$2,140.00
less PAYE
$435.48
less donation
$12.00
plus tax credit for payroll donation
$3.99
equals take home pay
$1,696.51